Tim Geithner: It Would Be Catastrophic If People Start To Doubt Whether The U.S. Can Pay Its Obligations

Tim Geithner gave reassurance on "Meet the Press" today that the
debt ceiling will be raised.

As the deadline to raise the debt limit approaches, Republicans
are trying to get Democrats to first agree to more spending cuts.

There's been some question about whether or not waiting until the
last minute for political gain is flirting with disaster, but
Geithner says, don't worry - at a certain point, it's not a
political game anymore. Everyone in political leadership
understands that "you can't play around with this," he says.

The debt limit will be raised because "if you allow people to
start to doubt whether the U.S. can pay its obligations - that
would be catastrophic," says Geithner. "And the leadership
understands that."

Here's a snippet of the conversation from Meet the Press:

Will the President agree, as Republicans demand, to tie
spending cuts to an agreement raising the debt ceiling?

Geithner: "Congress is going to raise the debt limit. That's
absolutely essential to preserve our credit-worthiness. We're a
country that meets its obligations, and we have to meet our
obligations, and they know that."

"In fact I heard the leadership tell the President that on
Wednesday."

....

"But at the same time, we're going to work with Reps and Dems to
try to bring our fiscal balance back down towards balance so
we're living within our means again. We have to do both. And
we're going to work very hard to get Dems and Reps to work
together on this. We want Congress to put together a
comprehensive framework that can reduce our long-term deficits.

"But if, by the time we need to raise the debt limit, if all that
hasn't been worked out, Congress is still going to raise the debt
limit. Leaders should know that."

Or else what? Some say those warnings of catastrophe are
overblown.

Geithner: "That's absolutely not the case... Republicans
absolutely understand that. You can't play around with this. You
can't take this too long."

....

"And those people up there who are telling people that you can
take this to the brink because it gives them some leverage -
they're going to own the responsibility of the risks that creates
for the American economy."

What are the stakes?

Geithner: "If you allow people to start to doubt whether the U.S.
can pay its obligations - that would be catastrophic. And the
leadership understands that."

Jamie Dimon also
said recently that the results of not raising the debt limit
would be "catastrophic."

Dimon told the Chamber of Commerce, "If anyone wants to [cap the
debt ceiling], which I think would be catastrophic and
unpredictable, I think they're crazy."